PNBC Princeton National Bancorp Inc (CE)

Princeton National Bancorp, Inc. (NASDAQ:PNBC) Tony Sorcic, President & CEO, announced today, "Princeton National Bancorp, Inc. had an excellent year in 2005. As reported in previous press releases, the Company completed the acquisition of Somonauk FSB Bancorp, Inc. as of July 31, 2005. The acquisition of Somonauk has had a positive effect on earnings. In October 2005, Citizens First National Bank opened its new office in Plano, Illinois. Progress continues on the construction of the facility in Aurora, Illinois. It is anticipated this facility will open in April of 2006. We believe the fast-growing communities of Plano and Aurora/Oswego provide opportunities to expand the Company's market share." Sorcic continued, "The Company generated record results in 2005 in net income, diluted earnings per share, total assets and total other income. Net income totaled $7,574,000, diluted earnings per share were $2.37, total assets were $945.3 million, and total other income was $8,840,000. In comparison to December 31, 2004, net income increased 10.2%, diluted earnings per share increased 7.2%, total assets increased 44.2%, and total other income increased 6.3%. The return on equity of 13.43% is in line with the 2004 return on equity of 13.46%." Sorcic concluded, "The Company experienced a 42% increase in total loans over the last twelve months. Loan growth of $57,802,000 and the addition of the Somonauk loan portfolio of $113,966,000 both contributed to these results. PNBC did not record a loan loss provision during 2005. The Company's loan portfolio continues to be comprised of high-quality loans and experienced minimal loan charge-offs during the year." The Company ended 2005 with total deposits of $827.9 million (including repurchase agreements), an increase of 40.2% from year-end 2004. During 2005, the Company attracted new core deposits totaling $44,710,000 and added $192,792,000 from the acquisition of Somonauk. This increase in deposits occurred in checking, time deposit, repurchase agreements and money market accounts. In January 2005, the Company announced a 100,000 share stock repurchase program. The Company completed the program in December 2005, having purchased the shares at an average price of $31.50 per share. Since 1997, the Company has repurchased 1,234,271 shares of common stock through stock repurchase programs. Net income for the fourth quarter of 2005 totaled $2,135,000, diluted earnings per share totaled $.63, and the return on average equity was 13.64%. This compares favorably to the fourth quarter 2004 net income of $1,689,000, diluted earnings per share of $.55, and the return on average equity of 12.99%. Total non-interest income for the quarter of $2,634,000 rose 38.2% from $1,906,000 in the fourth quarter of 2004. For the twenty-second consecutive quarter, the Company's annualized non-interest income equaled or exceeded 1% of average assets. The stock price reached a record high of $34.00 during 2005 and closed the year at $33.25. The 2005 year-end stock price represents an increase of 15.5% from the 2004 year-end closing price of $28.80. The Company has set its annual meeting date for April 25, 2006 at 10:00 A.M. at The Galleria Convention Center in Princeton, Illinois. The record date for the Annual Meeting will be February 27, 2006. Princeton National Bancorp, Inc. is a $945.3 million community bank with locations throughout northern Illinois, several of which are in high-growth markets and two additional locations (Aurora and Elburn) which will also be in high-growth markets. These communities include: Huntley, Hampshire, Minooka, Sandwich, Somonauk, Plano, Genoa, Millbrook, Newark, Peru, Princeton, Henry, Oglesby, Spring Valley and DePue. The Subsidiary Bank, Citizens First National Bank, provides financial services to meet the needs of individuals, businesses and public entities. This press release contains certain forward-looking statements, including certain plans, expectations, goals, and projections, which are subject to numerous assumptions, risks, and uncertainties. These forward-looking statements are identified by the use of words such as 1) believes, 2) anticipates, 3) estimates, 4) expects, 5) projects or similar words. Actual results could differ materially from those contained or implied by such statements for a variety of factors including: changes in economic conditions; movements in interest rates; competitive pressures on product pricing and services; success and timing of business strategies; the nature, extent, and timing of governmental actions and reforms; and extended disruption of vital infrastructure. The figures included in this press release are unaudited and may vary from the audited results. -0- *T CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data) December 31, 2005 December 31, (unaudited) 2004 ------------ ------------ ASSETS Cash and due from banks $23,635 $14,025 Interest-bearing deposits with financial institutions 110 65 Federal funds sold 0 0 ------------ ------------ Total cash and cash equivalents 23,745 14,090 Loans held for sale, at lower of cost or market 2,587 1,301 Investment securities available-for-sale, at fair value 235,371 175,129 Investment securities held-to-maturity, at amortized cost 16,115 13,680 ------------ ------------ Total investment securities 251,486 188,809 Loans, net of unearned interest 581,812 410,044 Allowance for loan losses (3,197) (2,524) ------------ ------------ Net loans 578,615 407,520 Premises and equipment, net 26,412 17,924 Bank-owned life insurance 20,434 15,870 Interest receivable 8,714 5,000 Goodwill, net of accumulated amortization 22,665 1,355 Intangible assets, net of accumulated amortization 6,843 1,317 Other real estate owned 468 0 Other assets 3,294 2,552 ------------ ------------ TOTAL ASSETS $945,263 $655,738 ============ ============ ---------------------------------------------------------------------- LIABILITIES Demand deposits $103,622 $75,015 Interest-bearing demand deposits 222,675 191,271 Savings deposits 109,491 58,675 Time deposits 362,770 248,600 ------------ ------------ Total deposits 798,558 573,561 Customer repurchase agreements 29,375 16,870 Advances from the Federal Home Loan Bank 8,346 5,000 Interest-bearing demand notes issued to the U.S. Treasury 2,154 1,765 Federal funds purchased 1,000 1,000 Trust Preferred securities 25,000 0 Note payable 6,700 900 ------------ ------------ Total borrowings 72,575 25,535 Other liabilities 10,986 4,273 ------------ ------------ Total liabilities 882,119 603,369 ------------ ------------ STOCKHOLDERS' EQUITY Common stock 22,392 20,699 Surplus 16,968 7,810 Retained earnings 45,786 42,156 Accumulated other comprehensive income (loss), net of tax (482) 951 Less: Treasury stock (21,520) (19,247) ------------ ------------ Total stockholders' equity 63,144 52,369 ------------ ------------ TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $945,263 $655,738 ============ ============ CAPITAL STATISTICS (UNAUDITED) YTD average equity to average assets 7.21% 8.24% Tier 1 leverage capital ratio 6.46% 7.62% Tier 1 risk-based capital ratio 9.26% 10.94% Total risk-based capital ratio 9.76% 11.49% Book value per share $18.87 $17.13 Closing market price per share $33.25 $28.80 End of period shares outstanding 3,346,443 3,058,000 End of period treasury shares outstanding 1,131,853 1,081,841 CONSOLIDATED STATEMENTS OF INCOME (unaudited) (dollars in thousands, except share data) THREE MONTHS THREE MONTHS FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED Dec. 31, 2005 Dec. 31, 2004 Dec. 31, 2005 Dec. 31, 2004 ------------- ------------- ------------- ------------- INTEREST INCOME Interest and fees on loans $9,730 $6,104 $31,339 $23,518 Interest and dividends on investment securities 2,607 1,598 8,445 6,147 Interest on federal funds sold 45 22 120 30 Interest on interest- bearing time deposits in other banks 24 18 67 24 ------------- ------------- ------------- ------------- Total Interest Income 12,406 7,742 39,971 29,719 ------------- ------------- ------------- ------------- INTEREST EXPENSE Interest on deposits 4,689 2,318 13,787 8,596 Interest on borrowings 867 153 1,939 474 ------------- ------------- ------------- ------------- Total Interest Expense 5,556 2,471 15,726 9,070 ------------- ------------- ------------- ------------- Net interest income 6,850 5,271 24,245 20,649 Provision for loan losses 0 0 0 375 ------------- ------------- ------------- ------------- Net interest income after provision 6,850 5,271 24,245 20,274 ------------- ------------- ------------- ------------- NON-INTEREST INCOME Trust & farm management fees 409 406 1,601 1,451 Service charges on deposit accounts 1,032 772 3,448 3,149 Other service charges 454 288 1,407 1,165 Gain on sales of securities available-for- sale 39 34 89 216 Gain on sale of loans 63 0 63 465 Brokerage fee income 193 94 697 607 Mortgage banking income 253 155 780 561 Bank-owned life insurance 160 135 604 555 Other operating income 31 22 151 146 ------------- ------------- ------------- ------------- Total Non- Interest Income 2,634 1,906 8,840 8,315 ------------- ------------- ------------- ------------- NON-INTEREST EXPENSE Salaries and employee benefits 3,792 2,901 13,400 11,129 Occupancy 453 350 1,558 1,368 Equipment expense 706 465 2,124 1,653 Federal insurance assessments 65 55 244 229 Intangible assets amortization 139 52 324 208 Data processing 265 191 870 747 Advertising 234 220 770 743 Other operating expense 1,102 759 3,963 3,426 ------------- ------------- ------------- ------------- Total Non- Interest Expense 6,756 4,993 23,253 19,503 ------------- ------------- ------------- ------------- Income before income taxes 2,728 2,184 9,832 9,086 Income tax expense 593 495 2,258 2,214 ------------- ------------- ------------- ------------- Net income $2,135 $1,689 $7,574 $6,872 ============= ============= ============= ============= Net income per share: BASIC $0.64 $0.55 $2.39 $2.22 DILUTED $0.63 $0.55 $2.37 $2.21 Basic weighted average shares outstanding 3,352,420 3,060,661 3,174,321 3,088,881 Diluted weighted average shares outstanding 3,384,678 3,088,172 3,201,154 3,116,078 PERFORMANCE RATIOS (annualized) Return on average assets 0.90% 1.05% 0.97% 1.11% Return on average equity 13.64% 12.99% 13.43% 13.46% Net interest margin (tax- equivalent) 3.54% 3.86% 3.73% 3.92% Efficiency ratio (tax- equivalent) 66.70% 65.90% 66.18% 63.96% ASSET QUALITY Net loan charge-offs $139 $19 $167 $101 Total non- performing loans $3,825 $328 $3,825 $328 Non-performing loans as a % of total loans 0.66% 0.08% 0.66% 0.08% *T